Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : GOLD-XAU -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (1090)	1/14/1998 10:05:00 AM
From: Bucky Katt	Read Replies (1) \| Respond to of 1756

Strapped for cash, Indonesia's well-off pawn their cars and gold January 14, 1998 JAKARTA, Indonesia At a pawn shop, plastic bags of jewelry hang from metal racks. In warehouses, Mercedes-Benzes and other ritzy cars sit in rows, turned in by hard-up owners who can't afford to keep them. Indonesia's well-off are feeling the pinch of the currency crisis that has battered their economy since July. Many are selling their gold, jewelry and electronic equipment for ready cash. "I haven't been paid in two months,'' Darmo, a 51-year-old mother of three, said Tuesday after sliding a gold ring off her finger at a pawn shop in an affluent capital neighborhood. She is a secretary in the construction business, one of the industries most heavily hit by the economic turmoil. Business has increased up to 40 percent in the last five months, said Mahful Umar, director of the south Jakarta office of the Perum Pegadaian pawn company. People are dumping diamonds, motorcycles and stereos. Many of the sellers are middle-class people who cannot get credit at cash-strapped banks. But the crisis also is hurting the upper reaches of Indonesian society, including the well-connected families that have thrived on political links for decades. "It has been taken for granted that if you are a government official and you occupy a very high place in the bureaucracy, to be rich is something natural,'' said Mochtar Buchori, a government critic who is the retired head of the Indonesian Institute of Science. The most prominent family is that of President Suharto, whose six children command business empires in communications, banking, toll roads and power plants. While Suharto has led Indonesia through steady economic growth during his 32 years in power, critics say cronyism at the top of the government helped fuel the crisis that has seen the rupiah lose about 70 percent of its value since July. Now, as the International Monetary Fund pushes Indonesia to implement economic reforms tied to a $40 billion bailout package, the once-unchallenged elite is taking blows. In November, the government shut 16 banks, including one owned by a son of Suharto, Bambang Trihatmodjo. Last weekend, it suspended 15 projects, one of them a power station promoted by Siti Hardiyanti Rukmana, the eldest daughter of the president. Still, a jet plane project that has been criticized as wasteful is going forward. It is sponsored by Research and Technology Minister B.J. Habibie, a longtime ally of 76-year-old Suharto. "Some pet projects are still sacrosanct,'' a columnist wrote in Tuesday's edition of The Indonesian Observer. Bargains flourish amid the crisis. At the Jakarta warehouses of the Pegadaian pawn company, BMWs are priced from $5,900 to $7,100. People of lesser means are pawning plates and glasses. Millions of poor Indonesians face more immediate woes, as unemployment and food prices soar. There also are fears of social unrest, especially later this month if companies don't have the funds to pay annual bonuses to their workers. Workers in this predominately Muslim nation legally are entitled to one month's extra salary ahead of celebrations to mark the end of Ramadan, Islam's holy month, which this year fell in January. During the weekend, about 500 workers staged a strike when their ceramic company paid half of their bonus in cash and the rest in crockery. Despite recent calls for new leadership, many Indonesians rarely criticize Suharto directly. Yet there is a growing perception that his children and close associates exacerbated the economic troubles of the world's fourth most populous nation. "We hope that this will be the turning point, that we finally look at the excesses in a different way,'' Buchori said.